Financials Weigh on European Markets

Ivaylo
05 Feb, 2001
New York City

Advances in upbeat oil and property sectors on Monday as well as in some airlines could not offset losses in banking stocks. Credit Suisse led the decliners in the financial sector on a down grade form ING, while Faurecia SA dragged the auto stocks lower on poor performance. Oil stocks in Total and BP rose on higher price of oil, while Ryanair gained on strong Q3 results. FTSE 100 in London was marginally 0.1% higher, Frankfurt Xetra Dax dipped 0.2% and the CAC 40 in Paris was flat.

[R]6:30AM European markets traded flat on Monday on weakness in banks, autos.[/R]
European markets were flat on Monday. By mid morning, FTSE 100 in London was marginally 0.1% higher at 6,314.3, Frankfurt Xetra Dax dipped 0.2% to 6,874.6 and the CAC 40 in Paris was flat at 5,674.98.

Advancers

Irish airline company Ryanair surged 6.1% on an upbeat figures of Q3 results. The company posted a surprising 30% increase in Q3 net profit, contrary to analysts’ expectations. Oil companies gained as the price of crude oil was firm around $59 in early trading. French Total advanced 0.7%, while BP added more than 1.3%. Property groups were also stronger with Unibail of France leading the sector higher, rising 4.8% on an update to overweight from neutral by JP Morgan.

Decliners

The leading decliners were Credit Suisse, falling 1% and pulling the sector lower as ING lowered its recommendation on the stock and reduced its rating from buy to hold, which led to profit-profit. Faurecia, the largest maker of auto interior in Europe plunged 5.6% after it said its loss widened after writing down assets for a second year in a row. Faurecia led other major companies lower like Renault, down 1% and DaimlerChrysler AG, off 0.4%. Of the stocks in focus, Endesa lost 2.8% after German utility Eon submitted its renewed bid for acquiring the Spanish company, which was lower than Endesa closing price on Friday.

Oil and gold

Oil prices declined on Monday below $59 and were down 15 cents for light, sweet crude for March delivery at $58.87 a barrel on the New York Mercantile Exchange. Brent crude for March delivery on the ICE Futures exchange dipped 31 cents to $58.10 a barrel. A report of losses at metals-trading hedge fund Red Kite Management Ltd sent gold futures lower on Monday. Gold for immediate delivery fell $1.37 an ounce, or 0.2%, to $646.48.

Currencies

A decision on European interest rates later this week weighed on the euro and the 13-nation currency lost to the US dollar. The euro fetched $1.2940 in morning European trading, down from $1.2967 in New York late Friday. The British pound also declined to $1.9591 from $1.9673, while the dollar retreated to 120.74 Japanese yen from 121.07 yen.

[R]5:00AM Copper declined Friday on profit-taking. Gold and silver followed suit.[/R]
The front-month March copper contract shed 10.75 cents to finish at $2.4230 per pound, while April gold also dipped $11.50 to end at $651.50 a troy ounce. March silver declined 35 cents in line with copper and gold to $13.375 an ounce. April platinum decreased $29.30 to $1,163.50 an ounce, while March palladium declined $6.65 to $338.25 an ounce.

March crude oil contract gained $1.72 to end at $59.02 a barrel and February heating oil added 2.51 cents to close at $1.6840 a gallon. February gasoline advanced 4.76 cents to end at $1.5729 a gallon, while March natural gas dropped 5.4 cents to close at $7.476 per million British thermal units.

On the New York Board of Trade, front-month March Arabica coffee gained 1.10 cent to close at $1.1875 a pound and raw sugar futures in foreign ports for March delivery ended down 0.13 cent at 10.50 cents a pound.